Canadian Debtors Association urges changes to Bankruptcy and Insolvency Act

Credit, debt and insolvency industry players must work together to fortify the "deficient" Act

HAMILTON, ON, Feb. 8, 2022 /CNW/ - The Canadian Debtors Association is calling on all parties in the credit, debt and insolvency industry to work together and modernize Canada's Bankruptcy and Insolvency Act (BIA) to help Canadians in financial difficulty.

"A core principle of Canada's insolvency legislation and policy is to provide a "fresh start" for people who are overwhelmed by debt," says Canadian Debtors Association President and CEO Henrietta Ross. "This principle is widely accepted by legislators, stakeholder groups, academics and insolvency experts. Generally, it entails obtaining relief from existing debt so that debtors can regain control of their finances."

But while the BIA intends a fresh start, debtors see this as a false start, because after undertaking a BIA-subscribed debt relief solution, debtors experience problems from inaccurate insolvency-related reporting on their credit report. This inaccurate reporting is widespread and frustrates the very underpinning of the BIA by thwarting the fresh start Canadians expect and deserve. To resolve this dilemma, new legislative measures are needed that will stipulate the correct representation of insolvency-related information on consumer credit reports.

"Over the past several years, there has been explosive growth in the use of consumer credit and a massive expansion in how consumer credit reports and personal credit history are used," says Ross. "These monumental changes in the volume and use of credit reports touch virtually every important aspect of the daily lives of Canadians."

Because credit reports wield such enormous power, with significant influence over the livelihood and well-being of individuals, ensuring accurate information is crucial. Accurate information is also imperative because a bankruptcy or a consumer proposal is a closely scrutinized part of the consumer's credit history.

"The BIA must preserve its essential integrity by introducing provisions for clear standards that address insolvency-reporting information and regulated measures that ensure the accuracy of this information on consumer credit reports," says Ross.  "The time has come to fortify the legislation and regulations by adding provisions for insolvency reporting to ensure the standardization and accuracy of this information on consumer credit reports."

About The Canadian Debtors Association 

The Canadian Debtors Association (CDA) is a national non-profit organization that is committed to building a better Debtor experience, particularly for individuals and families who are financially vulnerable. CDA's transformational vision includes introducing better structures, supports and the care that is needed for Debtors to successfully recover from financial breakdown and insolvency. For more information, visit  www.debtorsvoice.org

SOURCE Canadian Debtors Association